BROSSARD, QUEBEC - The Honourable Michael M. Fortier, Minister of Public Works and Government Services, on behalf of the Honourable Maxime Bernier, Minister of Industry, today announced two repayable investments totalling $3.2 million in research and development (R&D) projects that will support two Canadian firms' participation in the multinational Joint Strike Fighter (JSF) program. These projects undertaken by Adacel Inc. and CaseBank Technologies Inc. will create and maintain highly skilled jobs in Canada, while contributing to improved pilot safety around the world.

"Canada's new government is working hard to maximise business opportunities available to Canadian firms under the JSF program," said Minister Fortier.

"Canada's aerospace and defence sector is a world-leader in innovative R&D projects," said Minister Bernier. "These investments focus on keeping pilots safe and using technology to detect problems before they happen."

Adacel Inc. a Quebec company based in Brossard, will receive a $1.5 million investment in a $3.8 million R&D project to develop an easy to use, adaptable and supportable speech recognition system. The technology will enable pilots to execute a variety of commands such as navigation and checklists by voice activation, thus keeping the pilot's focus on flying the aircraft and other mission-critical activities.

"This investment enables us to participate actively in the development of the world's most advanced fighter airplane through the application of leading edge speech recognition technology to the control of cockpit avionics," said Seth Brown, General Manager, Adacel Canada. "We appreciate the Government of Canada's continued support of advanced technology opportunities which otherwise may not be available to businesses of our size."

CaseBank Technologies Inc. of Brampton, Ontario, will receive $1.7 million for a $4.4-million project to develop software that will significantly improve the efficiency of maintenance support throughout the entire life cycle of the aircraft. This problem-solving diagnostic technology will yield both cost-saving and public safety benefits.

"This investment allows CaseBank to advance its diagnostic technology in collaboration with major international aerospace companies," said Phil D'Eon, President and Chief Technology Officer. "Our partnership with the Government of Canada helps to ensure that our technology will continue to be recognized as state-of the-art and globally competitive."

These investments are being made through Technology Partnerships Canada, an agency of Industry Canada, using a new model contribution agreement

(http://tpc-ptc.ic.gc.ca/epic/internet/intpc-ptc.nsf/en/hb00526e.html) that emphasizes enhanced transparency and accountability.

Backgrounder

Canada's New Government Invests in R&D Technology for Joint Strike Fighter Program

The Government of Canada is investing in the multinational Joint Strike Fighter (JSF) program by committing $3.2 million to two research and development projects with Adacel Inc. of Brossard, Quebec and CaseBank Technologies Inc. of Brampton, Ontario.

The JSF program is a U.S.-led multinational effort to build an affordable, multi-role, fifth-generation stealth fighter aircraft. In February 2002, the Government of Canada signed a memorandum of understanding with the United States Department of Defence, signalling the beginning of Canadian participation on the JSF program and providing the Canadian aerospace industry with access to the largest international defence contract ever awarded. This program generates many technological and economic benefits for Canadians.

As part of a $3.8 million program, the $1.5 million investment with Adacel aims to provide an easy to use, adaptable and supportable speech recognition system for use in the cockpit of the F-35 aircraft being produced by Lockheed Martin. This technology will free up the pilot's hands allowing for voice commands under high gravity force manoeuvres. The system will be capable of functioning in a hostile acoustical environment using very limited processing resources. Some of the commands supported by the system will include navigation, checklists, tactical functions, and data retrieval.

Based in Brossard, Quebec, Adacel Inc. has 150 employees and specializes in Air Traffic Control Simulation and Air Traffic Management software technologies. Chosen in September 2005 by Lockheed Martin to develop the speech recognition system, Adacel's market for advanced software applications and services is global, servicing civil and military organizations, aeronautical universities and large international aviation and defence suppliers.

CaseBank will receive an investment of $1.7 million in a $4.4 million project to enhance software tools and methods used to plan for the effects of possible product failures and improve the level of automation in diagnosing faults in complex aircraft systems. While this technology is targeted at the F-35 aircraft being produced by Lockheed Martin through the JSF program, it will also be appropriate for use in other advanced aircraft.

CaseBank employs approximately 25 people and specializes in software systems designed to support the troubleshooting of complex equipment, systems and processes. It is among the few companies in the world specializing in Diagnostics, Prognostics, and Health Management (DPHM), recognized as a growth area in the aerospace and defence markets.

Prices charged by manufacturers, as measured by the Industrial Product Price Index (IPPI), were down 0.1% in October, following a 1.5% drop in September. Lower prices for petroleum products were offset by higher prices for primary metal products and motor vehicles.

The 12-month change in the IPPI was up 1.2%, a lower rate of growth compared to the year-over-year increase of 1.4% in September. Upward pressure came mainly from higher prices for primary metal products and pulp and paper products.

The Raw Materials Price Index (RMPI) was down 2.8% from September to October, following a 5.2% decline in September. The decrease was due to mineral fuels, as prices for crude oil declined for a third consecutive month. On the other hand, non-ferrous metals and vegetable products registered significant price increases.

Compared to October of last year, raw materials cost factories 2.0% more, a significant change from the year-over-year increase of 4.0% in September.

The IPPI stood at 113.4 (1997=100) in October, down from a revised level of 113.5 in September. The RMPI stood at 155.5 (1997=100), down from 160.0 in September.

IPPI: Petroleum product prices continue to fall

On a month-over-month basis, manufacturers' prices were down 0.1%, as lower prices for petroleum products were offset by higher prices for primary metals and motor vehicles.

Petroleum and coal product prices decreased by 6.3% compared to September, the third consecutive monthly decline. If petroleum and coal product prices had been excluded, the IPPI would have increased 0.6% rather than falling 0.1%.

Lower prices were also observed for lumber and other wood products as well as meat, fish and dairy products.

On the other hand, prices for primary metal products rose 4.4% compared to September, following two months of decline. Prices for nickel products were up by 15.9%, due to strong demand and lower inventories. Higher prices were also observed for refined zinc products (+19.6%), copper and copper alloy products (+7.0%) as well as aluminum products (+1.8%).

Motor vehicles and other transport equipment were up 0.7%, mainly due to a weaker Canadian dollar. Prices for fruit, vegetable and feed products (+0.9%), as well as pulp and paper products (+0.8%), were also higher compared to September.

IPPI: Primary metal products are the major contributors to the 12-month change

The IPPI was up 1.2% in October compared with the same month a year earlier, a deceleration in the rate of growth for a third consecutive month. The slowdown in the annual increase was mainly due to the prices of petroleum products. If petroleum and coal product prices had been excluded, the IPPI would have increased 2.9%.

Prices for primary metal products were up 31.8% compared to October 2005. Prices for nickel products (+142.4%), copper products (+74.9%), refined zinc products (+148.8%) and aluminum products (+16.5%) were all higher compared with one year earlier.

Higher prices for pulp and paper products, metal fabricated products, non-metallic mineral products, fruit, vegetable and feed products and tobacco products also contributed to the annual increase.

The annual rate of growth in the IPPI was dampened by lower prices for petroleum and coal products (-14.0%), as well as lower prices for motor vehicles and other transport equipment (-2.7%), lumber and other wood products (-7.9%) and chemicals and chemical products (-2.5%).

RMPI: Crude oil prices continue to push down the cost of raw materials

Raw material prices fell 2.8% in October, the third consecutive monthly decrease following a decline of 5.2% in September.

Mineral fuels were the major contributor to this monthly drop, with prices declining 10.7% compared to September. Prices for crude oil were down 12.3%, mainly due to higher inventories as well as weaker demand. If mineral fuels had been excluded, the RMPI would have risen 5.0% from September instead of falling 2.8%.

Non-ferrous metal prices were up 11.8%, as prices for zinc, copper, lead, radio-active concentrates and nickel increased due to lower inventories and strong demand.

Prices for vegetable products rose 6.3% from September, as prices for wheat, corn, canola and soybeans fell. This was mainly the result of lower than expected crop production due to adverse climate conditions as well as strong demand.

Prices increased for animal and animal products (+0.3%) and ferrous materials (+0.1%) from September to October, while prices for non-metallic minerals remained unchanged.

On a 12-month basis, the price of raw materials rose 2.0% in October, slower than the 4.0% year-over-year increase in September. This continues the slowdown in the rate of growth observed since May 2006, when prices had increased 23.6% from the previous year. If mineral fuels had been excluded, the RMPI would have increased 24.8% instead of rising 2.0%.

Non-ferrous metals were the major contributors to the 12-month increase with prices rising 79.7%, mainly the result of year-over-year price increases for zinc, radio-active concentrates, copper, nickel and lead.

Prices were also higher than one year ago for wood, vegetable products, ferrous materials as well as non-metallic minerals.

Mineral fuels were down 16.1% with crude oil prices falling 16.9%. This was the largest negative year-over-year change since February 2004. Prices for animals and animal products were also down slightly from a year ago.

Impact of the exchange rate

The value of the Canadian dollar fell 1.1% against the US dollar between September and October. As a result, the total IPPI excluding the effect of the exchange would have fallen 0.4% instead of its actual decrease of 0.1%.

On a 12-month basis, the value of the Canadian dollar rose 4.3% against the US dollar. If the impact of the exchange rate had been excluded, producer prices would have risen 2.3% between October 2005 and October 2006, rather than their actual increase of 1.2%.

Prices for intermediate goods are up slightly

Prices for intermediate goods increased by 0.1% from September. Higher prices for primary metal products, pulp and paper products, fruit, vegetable and feed products and motor vehicles were offset by lower prices for petroleum products, lumber products as well as meat, fish and dairy products.

Producers of intermediate goods received 3.2% more for their goods in October 2006 than in October 2005. Higher prices were registered for primary metal products, pulp and paper products, metal fabricated products, non-metallic mineral products, electrical and communication products, fruit, vegetable and feed products and rubber, leather and plastic fabricated products.

These increases were partly offset by lower prices for petroleum products, lumber products, chemical products, motor vehicles and tobacco products.

Lower prices for finished goods

Prices for finished goods were down 0.3% from September. Lower prices for petroleum products, lumber products and meat, fish and dairy products were partially offset by higher prices for motor vehicles and electrical and communication products.

Compared with October 2005, prices for finished goods declined by 1.8%. Lower prices were registered for petroleum products, motor vehicles as well as machinery and equipment.

These decreases were partly offset by higher prices for tobacco products, fruit, vegetable and feed products, meat, fish and dairy products, furniture and fixtures, beverages as well as non-metallic mineral products.

Note to readers

The Industrial Product Price Index (IPPI) reflects the prices that producers in Canada receive as the goods leave the plant gate. It does not reflect what the consumer pays. Unlike the Consumer Price Index, the IPPI excludes indirect taxes and all the costs that occur between the time a good leaves the plant and the time the final user takes possession of it, including the transportation, wholesale, and retail costs.

Canadian producers export many goods. They often quote their prices in foreign currencies, particularly for motor vehicles, pulp, paper, and wood products. Therefore, a rise or fall in the value of the Canadian dollar against its US counterpart affects the IPPI.

The Raw Materials Price Index (RMPI) reflects the prices paid by Canadian manufacturers for key raw materials. Many of these prices are set in a world market. Unlike the IPPI, the RMPI includes goods not produced in Canada.

Canadian manufacturers shipped goods worth $47.9 billion, down 3.3% from August and the lowest level since December 2004. It was the second monthly decline in a row and the fastest rate of decline in shipments since August 2003.

After taking price fluctuations into account, the value of shipments was down just 1.2% to $44.1 billion, after levelling off in August. This indicates that most of September's decline in shipment value was due to lower prices.

On a year-to-date basis, the volume of shipments fell 1.0% between January and September this year, compared with the same period last year.

Shipments were off in 13 of 21 manufacturing industries and 3 were unchanged in September. Durable goods shipments tumbled 2.5% to $25.6 billion in the wake of the transportation sector's third monthly decrease in a row, and sixth in the last nine months.

Non-durable goods suffered from declining commodity prices in September as shipments fell 4.2% to $22.2 billion. The price of petroleum and coal products plunged 13.8%, their largest monthly price decline in over three years.

The transportation sector's problems did not stop with shipments. Total transportation inventories were up in September, and while new orders in the sector rose slightly, the motor vehicle industry dropped considerably.

Shipments fall on lower petroleum prices and transportation equipment output

Oil prices declined earlier than usual in September, largely due to strong inventory levels in the United States for gasoline and crude oil, and the prices continued to decline as inventories accumulated.

Canadian refineries continued to produce at slightly lower than capacity, but when combined with a price drop of 13.8%, shipments fell 15.3% to $4.7 billion.

Transportation equipment fell 2.9% to $8.9 billion, the third month of decline. September was a tense month for the motor vehicle assembly industry facing the possibility of the moth-balling of excess capacity in North America.

In spite of a relatively strong month of sales on both sides of the border, shipments in the motor vehicle industry fell 8.5% to $4.5 billion, as manufacturers drew down their finished goods inventories by 12.2% to fill customer orders. Shipments for auto parts suppliers fell 4.5% to $2.2 billion in the wake of the auto assembly slowdown.

Aerospace was the good-news industry in the transportation equipment sector through September, with shipments rising 18.1% to $1.3 billion on strong quarter-end deliveries. Due to the high value of goods produced by the aerospace industry, monthly swings of plus or minus hundreds of million dollars are not unusual. For the first nine months of 2006, aerospace shipments are 3.6% lower compared with the same period of last year.

Machinery manufacturing shipments fell 6.2% to $2.5 billion. The two-month decline of 8.5% has pushed this industry to its lowest level in 14 months.

Food manufacturing, the lone bright spot, was no match for widespread declines and tepid gains in all other sectors. Food shipments increased 2.0% to $5.8 billion. Canadian food processors shipped a billion dollars of product more than their counterparts in the petroleum and coal industry, the first time this has happened since oil prices began to take off in February of this year.

Shipments drop in seven provinces

British Columbia and Prince Edward Island posted small increases while shipments in Quebec were unchanged. Shipments fell in every other province in September — especially those provinces with a significant presence in the petroleum and coal industry. Shipment decreases in Nova Scotia, New Brunswick, Ontario and Alberta can be directly attributed to the falling value in petroleum products.

In Quebec, strong gains in the aerospace industry offset declines in oil refining, chemicals and the beverage and tobacco industries. Quebec shipments remained at $11.7 billion.

Manufacturing in Ontario lost ground in 16 of 21 industries, with the largest decline being more than half a billion dollars in the transportation equipment industry. Most of it was in motor vehicle manufacturing, which posted a 8.2% decline to $4.5 billion. The value of petroleum refining fell by 17.0% to $1.4 billion. Widespread declines included machinery (down 8.8% to $1.2 billion) and fabricated metals (down 8.1% to $1.3 billion).

A strong early harvest in Ontario pushed food industry shipments up 2.7% to a record high $2.4 billion.

Weaker oil prices were the main factor in the 5.0% decline in Alberta's manufacturing shipments — the largest monthly decline in more than three years. Shipments of petroleum and coal products fell 17.2% to $1.1 billion in September.

Shipments from British Columbia increased 0.2% to $3.5 billion. In spite of a 5.8% decrease in paper shipments to under a half billion dollars, increased shipments of food and fabricated metals offset the decline. Wood products remained British Columbia's number one industry, increasing by 1.2% to nearly three-quarters of a billion dollars.

Manufacturing shipments, provinces and territories
	August 2006r	September 2006p	August to September 2006
	Seasonally adjusted
	$ millions		% change
Canada	49,474	47,852	-3.3
Newfoundland and Labrador	169	168	-0.1
Prince Edward Island	106	106	0.1
Nova Scotia	779	731	-6.1
New Brunswick	1,273	1,153	-9.4
Quebec	11,681	11,685	0.0
Ontario	24,248	23,121	-4.6
Manitoba	1,181	1,160	-1.7
Saskatchewan	859	823	-4.2
Alberta	5,646	5,364	-5.0
British Columbia	3,526	3,532	0.2
Yukon	2	2	13.7
Northwest Territories including Nunavut	6	6	16.2
r revised p preliminary

Food and chemical products inventories lead inventory increase

Total inventories for manufacturers increased 0.6% to $63.4 billion in September, the third increase in a row. It was propelled by food inventories, which increased 3.4% to $5.2 billion, the ninth monthly increase in the last year and the highest inventory level since April 2004. Chemical inventories also increased for the 12th consecutive month to record levels, up 0.9% to $7.1 billion. Primary metals increased 1.9% to $6.6 billion.

Transportation equipment inventories increased 0.8% to $8.7 billion after falling 1.4% in August. The gain was concentrated in the automotive industry. Auto manufacturing inventories of goods in process and raw materials offset the decline of finished goods, resulting in total inventories climbing by 4.9% to $1.4 billion. Meanwhile, auto parts inventories rose 2.6% to $1.5 billion.

Aerospace inventories declined 1.2% to $3.9 billion on strong shipments of finished goods.

Wood products inventories decreased 1.7% to $4.6 billion, resulting from lower demand for housing in the United States and reduced logging activity.

Inventory in raw materials fell marginally while finished products and goods in process inventories increased in September.

Motor vehicle assembly leads decline in new orders

In September, new orders declined by 2.8% to $47.5 billion. New orders in transportation increased slightly, in spite of a 49.8% jump in the aerospace industry to $1.8 billion. This increase ended two months of large declines for aerospace, while the motor vehicle industry dropped nearly half a billion dollars of new orders, falling 9.8% to $4.2 billion. In total, the transportation equipment industry increased slightly to $9.0 billion.

After motor vehicle products, primary metals experienced the second largest decline in new orders, down 4.5% to $4.0 billion. New orders in fabricated metal products fell 5.8% to $2.6 billion.

Transportation and primary metals behind drop in unfilled orders

Unfilled orders declined 0.9% to $40.4 billion. The transportation equipment industry increased slightly to $20.6 billion, mainly on the strength of a 2.9% increase in aerospace, while the motor vehicle industry experienced the largest decrease, falling 21.5% to $991 million.

Aside from motor vehicles, the primary metals industry was the other major contributor to the decline in unfilled orders, falling 11.2% to $1.8 billion in September.

Inventory-to-shipment ratio at highest level since August 2003

The inventory-to-shipment ratio increased from 1.27 to 1.32 in September, the highest level since August 2003.

With finished goods inventories rising 2.0% and shipments dropping 3.3%, the finished-product inventory-to-shipment ratio moved up two points to 0.46 in September.

The inventory-to-shipment ratio is a key measure of the time, in months, that would be required to exhaust inventories if shipments were to remain at their current level.

Manufacturing employment bounces back

According to the Labour Force Survey for September, employment increased by 19,300 (+0.9%) after declining by 11,300 (-0.5%) in August.

So far in 2006, the goods-producing sector has experienced weakness, the result of a sharp decline of 3.1% (-67,000) in manufacturing employment, mostly in Central Canada. Year to date losses have totaled 69,800 jobs (-3.2%) when comparing the first nine months of 2006 to the same period of 2005.

Shipments, inventories and orders in all manufacturing industries
	Shipments		Inventories		Unfilled orders		New orders		Inventories-to-shipments ratio
	Seasonally adjusted
	$ millions	% change	$ millions	% change	$ millions	% change	$ millions	% change
September 2005	49,767	-0.0	61,840	-0.5	41,113	-0.4	49,620	-2.0	1.24
October 2005	50,350	1.2	62,118	0.4	41,646	1.3	50,883	2.5	1.23
November 2005	49,319	-2.0	62,289	0.3	42,083	1.0	49,755	-2.2	1.26
December 2005	50,098	1.6	62,051	-0.4	41,753	-0.8	49,769	0.0	1.24
January 2006	49,668	-0.9	62,066	0.0	42,179	1.0	50,094	0.7	1.25
February 2006	48,479	-2.4	62,216	0.2	42,183	0.0	48,483	-3.2	1.28
March 2006	49,469	2.0	62,292	0.1	42,308	0.3	49,594	2.3	1.26
April 2006	48,827	-1.3	62,003	-0.5	41,386	-2.2	47,905	-3.4	1.27
May 2006	48,505	-0.7	62,495	0.8	41,154	-0.6	48,273	0.8	1.29
June 2006	49,356	1.9	62,132	-0.6	41,298	0.3	49,474	2.7	1.26
July 2006	49,800	0.9	62,952	1.3	41,489	0.5	49,991	1.0	1.26
August 2006	49,474	-0.7	63,012	0.1	40,830	-1.6	48,815	-2.4	1.27
September 2006	47,852	-3.3	63,387	0.6	40,449	-0.9	47,471	-2.8	1.32

Manufacturing industries except motor vehicle, parts and accessories
	Shipments		Inventories		Unfilled orders		New orders
	Seasonally adjusted
	$ millions	% change	$ millions	% change	$ millions	% change	$ millions	% change
September 2005	41,841	1.2	58,704	-0.6	38,956	-0.3	41,724	-1.2
October 2005	41,980	0.3	59,113	0.7	39,530	1.5	42,555	2.0
November 2005	41,351	-1.5	59,298	0.3	39,906	1.0	41,728	-1.9
December 2005	42,067	1.7	59,060	-0.4	39,447	-1.2	41,607	-0.3
January 2006	42,034	-0.1	59,053	-0.0	39,771	0.8	42,358	1.8
February 2006	40,787	-3.0	59,329	0.5	39,652	-0.3	40,669	-4.0
March 2006	42,086	3.2	59,496	0.3	39,552	-0.3	41,985	3.2
April 2006	41,432	-1.6	59,275	-0.4	38,668	-2.2	40,548	-3.4
May 2006	41,330	-0.2	59,782	0.9	38,422	-0.6	41,084	1.3
June 2006	41,966	1.7	59,464	-0.5	38,722	0.7	42,239	3.0
July 2006	42,405	1.0	60,023	0.9	38,986	0.7	42,670	1.0
August 2006	42,252	-0.4	60,213	0.3	38,594	-1.0	41,859	-1.9
September 2006	41,155	-2.6	60,484	0.5	38,529	-0.2	41,090	-1.8

Revisions and seasonal adjustment

Monthly, preliminary estimates are provided for the reference month with revised estimates, based on late responses, for the previous three months.

Non-durable goods industries include food, beverage and tobacco products, textile mills, textile product mills, clothing, leather and allied products, paper, printing and related support activities, petroleum and coal products, chemicals, and plastics and rubber products.

Durable goods industries include wood products, non-metallic mineral products, primary metals, fabricated metal products, machinery, computer and electronic products, electrical equipment, appliances and components, transportation equipment, furniture and related products and miscellaneous manufacturing.

Unfilled orders are a stock of orders that will contribute to future shipments assuming that the orders are not cancelled.

New orders are those received whether shipped in the current month or not. They are measured as the sum of shipments for the current month plus the change in unfilled orders. Some people interpret new orders as orders that will lead to future demand. This is inappropriate since the "new orders" variable includes orders that have already been shipped. Readers should note that the month-to-month change in new orders may be volatile. This will happen particularly if the previous month's change in unfilled orders is closely related to the current month's change.

Not all orders will be translated into Canadian factory shipments because portions of large contracts can be subcontracted out to manufacturers in other countries. Also, some orders may be cancelled.

MISSISSAUGA - The Honourable Harinder Takhar, Minister of Small Business and Entrepreneurship, recognizes the important role that small businesses have in keeping the province at the forefront of the global, high-tech aerospace industry. Today he visited 2Source Manufacturing Inc., which is rapidly becoming a leading supplier of high-precision bushings for key aircraft platforms.

The Minister regularly takes time to acknowledge some of the outstanding small business achievements across Ontario, and got a first-hand look at 2Source's next-generation manufacturing systems and procedures at its modern, 35,000 square foot facility in Mississauga.

Over the past two years, the entrepreneurial company has changed most of its product mix to focus on producing sophisticated bushings for commercial and military aircraft being built around the world. Approved by major aerospace Original Equipment Manufacturers, 2Source has been awarded important supply contracts, has delivered 300,000 bushings over the past 12 months, and is now shipping about 8,000 per week.

The bushings are installed in wing mechanisms, landing gear and engines for aircraft such as the Airbus 380 and Boeing 777 jumbo jets, the Blackhawk and V22 helicopters, Boeing and Lockheed F-16, F-18 and F-35 fighter jets, and Bombardier's CRJ regional jets.

"In the global marketplace, innovation is a key component that sets the best companies apart from the rest of the pack," said Takhar. "Through the Government of Ontario's Ideas to Market strategy, we're taking steps to ensure that innovative small and medium-sized businesses can get their leading-edge products to market faster and stay one step ahead of their competitors. Successful companies like 2Source are putting Ontario front and centre on the radar screen as a prime location for new investments, creating high-value, innovative jobs for our skilled workforce."

2Source CEO Robert Glegg said, "Ontario has been an excellent place for me to build and transform my businesses over the past 30 years. The province is home to several of our important aerospace customers, and the Government of Ontario is willing to give a helping hand to small companies developing a leading market position in high-technology industries. For example, through a program called Job Connect, we recruited and trained about 10 of our specialized machinists."

"An enhanced pool of skills has allowed us to produce higher value-added products, at a faster rate, more cost effectively, and in greater quantities, to meet the demanding requirements of aerospace industry players anywhere in the world. So we're confident about investing approximately $5 million here in Ontario during 2006 and 2007 to continue upgrading our equipment and skill sets," Mr. Glegg added.

Companies Who Adequately Stock Their Six Sigma Tool Kit with Relevant Technology Perform Better

TUALATIN, ORE. - iGrafx(R), a leading provider of Business Process Excellence solutions, announced today that it is a sponsor of a recent benchmark report published by the AberdeenGroup on the impact of Lean and Six Sigma initiatives on a wide variety of organizations. The report divides the companies surveyed into three groups according to their levels of practice and performance - Laggards, Industry Norm, and Best in Class. The research results show a clear correlation between the use of technology - like software specifically designed for Six Sigma practitioners - and Best in Class company performance.

According to Aberdeen, many companies still use generalist tools like Microsoft(R) Visio(R) and PowerPoint(R) for their business process analysis work. However, "Best in Class" organizations use technology specifically designed to document, analyze, refine and communicate business processes. These organizations enjoy increased product quality, higher revenue and profitability and lower overall costs than those who do not use software appropriate for business process analysis.

"Providing Six Sigma project teams with the necessary data capture and analysis tools is essential," said Cindy Jutras, VP & Service Director for AberdeenGroup. "Without the proper tools, teams spend too much time moving and scrubbing data and are prevented from spending the appropriate amount of time analyzing for improvement and control."

"For over 10 years our core mission has been to provide best in class software tools to analyze and improve business processes," said Ken Carraher, President of iGrafx. "We believe this study validates our value proposition and commitment to deliver best-of-breed strategic modeling tools and enable our customers to achieve the highest return on their investment in process improvement initiatives. Our tools continue to deliver innovative leading-edge functionality and ease of use that distances us from providers of generic drawing and charting tools."

Click here to request a complimentary copy of the full report. For more information and to purchase licenses of iGrafx software, call iGrafx at (503) 404-6050.

Increase in output of energy sector

The energy sector advanced 0.7% in August. Natural gas production and transportation, boosted by an increase in US demand and the replenishment of inventories with the approach of winter, were among the main engines of growth in the sector. After a strong increase in July, crude oil production and transportation rose modestly in August. Following two months of significant increases, oil and gas exploration declined -4.1%. Electricity production declined owing to the combined effect of low rainfall, causing a drop in the level of hydraulic reservoirs in British Columbia, and the closure of a larger-than-usual number of thermal power plants in Ontario.

The output of the mining sector excluding oil and natural gas advanced 1.5%. The growth was attributable to both metallic and non-metallic minerals.

Renovation and large vehicles boost trade

Wholesale trade grew 1.7% in August. The strong growth of renovation activities stimulated wholesale sales of building materials. Sales of personal and household goods, as well as machinery and electronic equipment, also contributed to these results. Following a strong gain in July, wholesale sales of motor vehicles declined.

Retail trade rose 1.1%, led by a strong advance in sales of new motor vehicles, spurred by incentive programs targeting purchasers of large vehicles (including minivans, sport utility vehicles, light and heavy trucks, vans and buses). Activity in home centres and hardware stores and in furniture, home furnishings and electronics stores also increased.

Manufacturing activity unchanged

For the second consecutive month, activity in the manufacturing sector was essentially unchanged in August. However, this sector's activity level was 1.7% lower than at its peak in December 2005. The manufacturing of non-durable goods grew 1.2%, while durable goods registered a marked decline (-0.7%). Of the 21 major groups, 12 were up, accounting for 55% of total manufacturing output.

The most significant gains were registered in the production of chemicals, food products and furniture. The largest declines were recorded in machinery, wood products, electrical appliances and transportation equipment. The production of motor vehicles and parts fell significantly for a second month in a row.

Industrial production (the output of mines, utilities and factories) grew 0.3% in August, primarily owing to the strong advance of the mining, oil and gas extraction sector. In the United States, industrial production was unchanged, with gains in manufacturing offsetting losses in the mining and utilities sectors.

Construction sector posts fourth monthly decline

For a fourth consecutive month, the construction sector declined in August (-0.1%). Decreases in residential and non-residential construction were partly offset by an increase in engineering and repair works. The 0.6% drop in residential construction was most evident in single-family homes, while there was an increase in apartment construction. Non-residential construction fell 0.3%, with the gain in the construction of commercial buildings only partially offsetting the drop in industrial and public buildings.

Other sectors

Tourism-related industries, such as transportation, accommodation and food services, benefited from the effects of a major international convention in Toronto, as well as the 1.2% increase in the number of international overnight visitors.

Total crop production for 2006 is expected to be lower than last year with an anticipated drop in harvests of wheat, barley, grain corn and canola. This decline follows an increase in production in 2005 compared to 2004.

Monthly gross domestic product by industry at basic prices in chained (1997) dollars
	March 2006r	April 2006r	May 2006r	June 2006r	July 2006r	August 2006p	August 2006p	August 2005 to August 2006
	Seasonally adjusted
	month-to-month % change						millions of dollars¹	% change
All Industries	0.1	0.1	0.1	-0.0	0.2	0.3	1,093,626	2.2
Goods-producing industries	-0.3	-0.2	-0.5	-0.0	0.1	0.2	334,636	0.0
Agriculture, forestry, fishing and hunting	-1.9	0.6	-1.0	-2.1	-1.6	-0.2	23,918	-8.2
Mining and oil and gas extraction	0.4	0.7	-2.3	0.0	1.3	1.6	40,174	2.1
Utilities	-0.9	-0.7	0.4	0.7	0.7	-1.1	27,768	-0.9
Construction	0.4	0.1	-0.2	-0.1	-0.4	-0.1	66,987	4.8
Manufacturing	-0.6	-0.7	-0.0	0.2	-0.0	0.0	174,368	-1.3
Services-producing industries	0.3	0.3	0.3	-0.0	0.2	0.4	760,522	3.3
Wholesale trade	0.5	0.4	1.6	-0.5	0.7	1.7	72,895	9.1
Retail trade	1.3	1.3	-0.4	0.0	0.5	1.1	66,351	6.0
Transportation and warehousing	0.5	0.1	0.2	-0.2	-0.1	0.5	52,982	2.7
Information and cultural industries	0.2	-0.0	0.2	0.5	0.2	0.0	44,373	1.2
Finance, insurance and real estate	0.2	0.3	0.2	0.2	0.4	0.1	221,572	3.0
Professional, scientific and technical services	0.1	0.3	0.1	0.1	-0.0	0.3	48,656	1.7
Administrative and waste management services	0.7	0.3	0.8	0.4	0.1	-0.0	25,748	5.7
Education services	-0.2	0.1	-0.1	-0.1	0.0	0.2	47,645	0.5
Health care and social assistance	0.3	0.1	0.1	-0.1	0.1	-0.1	61,835	1.6
Arts, entertainment and recreation	1.8	1.7	-1.2	-0.6	-2.7	1.8	9,122	0.6
Accommodation and food services	0.4	-1.9	1.9	-1.3	-0.5	0.8	23,797	3.1
Other services (except public administration)	0.2	0.1	0.3	0.2	0.0	0.1	26,838	2.2
Public administration	0.0	0.5	0.6	0.1	-0.0	-0.3	61,093	2.6
Other aggregations
Industrial production	-0.4	-0.4	-0.6	0.2	0.4	0.3	244,818	-0.4
Non-durable manufacturing industries	-0.4	-0.2	0.3	-0.6	-0.2	1.2	70,404	-2.0
Durable manufacturing industries	-0.7	-1.1	-0.2	0.7	0.1	-0.7	103,825	-0.8
Business sector industries	0.2	0.1	0.0	-0.0	0.2	0.4	930,119	2.3
Non-business sector industries	0.0	0.3	0.2	-0.0	0.0	-0.0	163,961	1.6
Information and communication technologies industries	0.6	0.1	0.3	0.5	0.1	0.0	65,068	3.0
Energy sector	0.2	0.1	-1.4	0.1	0.9	0.7	65,109	0.9
r revised p preliminary 1. Millions of chained (1997) dollars, seasonally adjusted at annual rates.

Note to readers

The monthly gross domestic product (GDP) by industry data are chained volume estimates with 1997 as their reference year. This means that the estimates for each industry and aggregate are obtained from a chained volume index multiplied by the industry's value added in 1997.

For the period 1997 to 2003, the monthly estimates are benchmarked to annually chained Fisher volume indexes of GDP obtained from the constant-price input-output tables. For the period starting with January 2004, the estimates are derived by chaining a fixed-weight Laspeyres volume index to the prior period. The fixed weights are the industry output and input prices of 2003. This makes the monthly GDP by industry estimates more comparable with the expenditure-based GDP data, chained quarterly.

Revisions

With this release of monthly GDP by industry, revisions have been made back to January 2006.

For more information about monthly GDP by industry, see the National economic accounts module on our website (http://www.statcan.ca/nea).

Prices charged by manufacturers, as measured by the Industrial Product Price Index (IPPI), were down 1.6% in September, following a 0.5% drop in August. Lower prices for petroleum products were the major contributors to this monthly decrease.

The 12-month change in the IPPI was up 1.3%, a lower rate of growth compared to the year-over-year increase of 3.6% in August. Upward pressure came mainly from higher prices for primary metal products.


The Raw Materials Price Index (RMPI) was down 5.2% from August to September, following a 3.7% decline the previous month. The decrease was due primarily to lower prices for crude oil.

Compared to September 2005, raw materials cost factories 4.0% more, down significantly from the year-over-year change of 9.6% in August.

The IPPI stood at 113.4 (1997=100) in September, down from 115.2 in August. The RMPI reached 160.0 (1997=100), down from a revised level of 168.7 in August.

IPPI: Lower prices for petroleum products

On a month-over-month basis, manufacturers' prices were down 1.6%, mainly due to lower prices for petroleum products.

Petroleum and coal products prices decreased by 13.8%, as the cost for crude oil declined for a second month. This was the largest monthly decline since the 13.6% drop in April 2003. If petroleum and coal product prices had been excluded, the IPPI would have remained unchanged rather than falling 1.6%.

Prices for primary metal products fell 1.0% compared to August, the third decline in four months. Prices for copper and copper alloy products were down by 6.4%, due to lower costs for input materials. Lower prices were also observed for silver, refined gold products as well as aluminum products.

On the other hand, prices for meat, fish and dairy products (+0.9%) as well as pulp and paper products (+0.3%) were higher compared to the previous month.

IPPI: Primary metal products are the major contributors to the 12-month change

The IPPI was up 1.3% in September compared with the same month a year earlier, a significant change from the previous five months, where the year-over-year increases ranged between 2.2% and 4.5%. The slowdown in the increase was mainly due to the prices of petroleum products. Indeed, if petroleum and coal product prices had been excluded, the IPPI would have increased 2.9%.

Prices for primary metal products were up 28.5% compared to September 2005. Prices for nickel products (+86.0%), copper products (+77.0%), refined zinc products (+127.4%) and aluminum products (+14.9%) were all higher compared with one year earlier.

Prices were also higher than one year ago for pulp and paper products, rubber, leather and plastic fabricated products, metal fabricated products, meat, fish and dairy products, non-metallic mineral products and tobacco products.

However, prices for petroleum and coal products fell 11.3% from September 2005, the first year-over-year decrease since March 2004.

Motor vehicles and other transport equipment prices were down 3.5% from a year ago, due to the effect of a stronger Canadian dollar.

Lumber and other wood products declined 6.3% compared to September 2005, as year-over-year decreases were recorded for softwood lumber (-6.2%) and particleboard (-41.9%). Prices were also lower than a year ago for machinery and equipment.

RMPI: Crude oil prices push down the cost of raw materials

Raw materials prices fell 5.2% in September, following a 3.7% decline in August. This was the largest monthly decrease since November 2004.

Mineral fuels were the major contributor to this monthly drop, with prices declining 9.9% compared to August. Prices for crude oil were down 11.6%, mainly due to higher inventories as well as softening demand. If mineral fuels had been excluded, the RMPI would have been unchanged from August instead of falling 5.2%.

Ferrous materials prices were down 3.6%, as prices for iron and steel scrap decreased 5.7%. Prices for vegetable products declined 1.6% from the previous month, as prices for natural rubber fell 18.4% due to increased production.

On the other hand, prices for wood and animal and animal products increased 1.0% and 0.4% respectively from August to September, while prices for non-metallic minerals remained unchanged.

On a 12-month basis, the price of raw materials rose 4.0% in September, down significantly from the 9.6% year-over-year increase in August, and the lowest rate of growth since March 2006, when prices had increased 5.5% from the previous year. If mineral fuels had been excluded, the RMPI would have increased 20.3% instead of rising 4.0%.

Non-ferrous metals were the major contributors to the 12-month increase, with prices rising 71.2%, mainly the result of year-over-year price increases for zinc, radio-active concentrates, copper, lead and nickel.

Prices were also higher than one year ago for wood, vegetable products as well as non-metallic minerals.

Mineral fuels were down 8.6%, with crude oil prices falling 9.5%. This was the first negative year-over-year change since March 2004. Prices for ferrous materials were also down from a year ago.

Impact of the exchange rate

The value of the Canadian dollar against the US dollar was up 0.2% between August and September. As a result, the total IPPI excluding the effect of the exchange would have fallen 1.5% instead of its actual decrease of 1.6%.

On a 12-month basis, the value of the Canadian dollar rose 5.5% against the US dollar. If the impact of the exchange rate had been excluded, producer prices would have risen 2.8% between September 2005 and September 2006, rather than their actual increase of 1.3%.

Lower prices for intermediate goods

Prices for intermediate goods decreased 1.5% from August. Lower prices for petroleum products, primary metal products as well as chemical products were the major contributors to this monthly drop.

These decreases were partly offset by higher prices for meat, fish and dairy products, pulp and paper products and fruit, vegetable and feed products.

Producers of intermediate goods received 4.0% more for their goods in September than in September 2005. Higher prices were registered for primary metal products, pulp and paper products, rubber, leather and plastic fabricated products, metal fabricated products, non-metallic mineral products, electrical and communication products and meat, fish and dairy products.

These increases were partly offset by lower prices for petroleum products, lumber products, motor vehicles and tobacco products.

Finished goods prices decrease

Prices for finished goods were down 1.6% from August. Lower prices for petroleum products were partially offset by higher prices for lumber products, pulp and paper products, meat, fish and dairy products and chemical products.

Compared with September 2005, prices for finished goods declined by 2.6%. Lower prices were registered for petroleum products, motor vehicles, machinery and equipment and electrical and communication products.

These decreases were partly offset by higher prices for fruit, vegetable and feed products, meat, fish and dairy products, tobacco products, chemical products, furniture and fixtures, beverages, rubber, leather and plastic fabricated products as well as lumber products.

Industrial product price indexes
(1997=100)
	Relative importance	September 2005	August 2006r	September 2006p	September 2005 to September 2006	August to September 2006
					% change
Industrial Product Price Index (IPPI)	100.00	111.9	115.2	113.4	1.3	-1.6
IPPI excluding petroleum and coal products	94.32	105.1	108.2	108.2	2.9	0.0
Aggregation by commodities
Meat, fish and dairy products	5.78	106.8	107.7	108.7	1.8	0.9
Fruit, vegetables, feeds and other food products	5.99	102.5	103.7	103.8	1.3	0.1
Beverages	1.57	121.4	122.5	122.6	1.0	0.1
Tobacco and tobacco products	0.63	178.2	187.9	187.9	5.4	0.0
Rubber, leather and plastic fabricated products	3.30	114.4	118.7	118.8	3.8	0.1
Textile products	1.58	99.9	100.0	100.0	0.1	0.0
Knitted products and clothing	1.51	104.4	104.9	104.9	0.5	0.0
Lumber and other wood products	6.30	90.7	85.2	85.0	-6.3	-0.2
Furniture and fixtures	1.59	115.5	118.1	118.1	2.3	0.0
Pulp and paper products	7.23	101.7	105.6	105.9	4.1	0.3
Printing and publishing	1.70	114.8	115.3	115.3	0.4	0.0
Primary metal products	7.80	110.7	143.8	142.3	28.5	-1.0
Metal fabricated products	4.11	120.7	124.0	123.9	2.7	-0.1
Machinery and equipment	5.48	107.3	106.8	106.8	-0.5	0.0
Motor vehicles and other transport equipment	22.16	94.7	91.4	91.4	-3.5	0.0
Electrical and communications products	5.77	93.1	93.5	93.4	0.3	-0.1
Non-metallic mineral products	1.98	114.9	120.0	120.1	4.5	0.1
Petroleum and coal products1	5.68	237.0	244.1	210.3	-11.3	-13.8
Chemicals and chemical products	7.07	122.1	122.5	122.4	0.2	-0.1
Miscellaneous manufactured products	2.40	109.6	113.2	112.5	2.6	-0.6
Miscellaneous non-manufactured products	0.38	171.3	243.6	266.1	55.3	9.2
Intermediate goods2	60.14	113.2	119.5	117.7	4.0	-1.5
First-stage intermediate goods3	7.71	121.1	145.8	144.7	19.5	-0.8
Second-stage intermediate goods4	52.43	112.0	115.5	113.6	1.4	-1.6
Finished goods5	39.86	110.0	108.8	107.1	-2.6	-1.6
Finished foods and feeds	8.50	111.9	113.6	113.9	1.8	0.3
Capital equipment	11.73	101.6	99.4	99.5	-2.1	0.1
All other finished goods	19.63	114.2	112.3	108.6	-4.9	-3.3
r revised p preliminary 1. This index is estimated for the current month. 2. Intermediate goods are goods used principally to produce other goods. 3. First-stage intermediate goods are items used most frequently to produce other intermediate goods. 4. Second-stage intermediate goods are items most commonly used to produce final goods. 5. Finished goods are goods most commonly used for immediate consumption or for capital investment.

Note to readers

The Industrial Product Price Index (IPPI) reflects the prices that producers in Canada receive as the goods leave the plant gate. It does not reflect what the consumer pays. Unlike the Consumer Price Index, the IPPI excludes indirect taxes and all the costs that occur between the time a good leaves the plant and the time the final user takes possession of it, including the transportation, wholesale, and retail costs.

Canadian producers export many goods. They often quote their prices in foreign currencies, particularly for motor vehicles, pulp, paper, and wood products. Therefore, a rise or fall in the value of the Canadian dollar against its US counterpart affects the IPPI.

The Raw Materials Price Index (RMPI) reflects the prices paid by Canadian manufacturers for key raw materials. Many of these prices are set in a world market. Unlike the IPPI, the RMPI includes goods not produced in Canada.